Last year I went to Mobile World Congress (MWC), the telco industry’s most important event, with a clear message for telecom leaders: The public cloud is coming, and it will change everything.
A couple weeks ago, I went back to Barcelona to beat the public cloud drum. But you know what I saw? It’s not “on the way” anymore. It’s already here.
The public cloud has arrived
Don’t believe me? Just look around. The signs are everywhere. This was the first year MWC had a cloud theme: CloudNet. Adam Selipsky, CEO of Amazon Web Services (AWS) delivered a keynote on the main stage. But there are other, more concrete examples:
Even though the industry is changing right before our eyes, I still hear from telco execs about all the reasons they CAN’T START their move to the public cloud, instead of all the great things they CAN DO with the public cloud.
Someone who was initially resistant to using the public cloud is banking’s JP Morgan Chase CEO, Jamie Dimon. He initially thought the public cloud was just about outsourcing; but a few years ago he admitted he was wrong. He now sees that the public cloud accelerates innovation for his company, and that using it creates a competitive advantage for him. In early 2022, I was reading the transcript from his Q4 2021 earnings call, when an analyst challenged his use of AWS. His response crystallized just how much his understanding of the public cloud has changed: “If we can spend $2 billion more and get to the cloud tomorrow, I would do that in a second.”
$2 billion dollars—and he wouldn’t hesitate if it would speed his move to the cloud. Just think about that for a second. This is an almost half-a-trillion-dollar company in a highly regulated industry with all the data sensitivity and privacy concerns that telco has—and he is all in. I loved his answer to that question so much, it became the cornerstone of my talk at MWC.
Telcos can become the future of digital consumers—IF they seize the public cloud opportunity
You can gain competitive advantage by using the public cloud, too. But you have to change the three things that slow you down.
Your systems are outdated, built on a tech stack from the 90s.
Your data is messy, with different data models in different databases spread across your organization.
Your employees don’t know how to use the public cloud.
To start to use the cloud as a competitive advantage, you need to modernize your systems, cleanse your data, and hire cloud talent.
Modernize your systems—for the speed
Inside a telco, there are thousands of legacy applications, running on premises, loaded with tons of technical debt. It’s a heavily customized, heavily integrated, rat’s nest of CRAP. While modernizing legacy systems will give you the opportunity to save lots of money, that’s not the main reason you move these workloads to the public cloud. You do it to gain market speed.
Telcos today struggle to get new ideas to market. New ideas take five times as long as they should to roll out because the legacy systems you have in place hamstring you. To be nimble and responsive in your market you need:
cloud-based systems that allow you to use all the greatness of the public cloud—the compute, scale, and software—seamlessly;
systems that give you the power to add a new database or artificial intelligence (AI) capabilities to a legacy system quickly;
systems that are flexible, allowing you to integrate with whatever you want and customize it easily; and
systems that are open, so you can change them without needing expensive customizations or consultants.
Your current systems can’t do any of that.
But I have good news for you! New, modern systems, built with cloud-first principles that are fast, flexible, open, and easy to use are coming to telco, and you need to go buy them. (Like my company, Totogi. Full disclosure: I’m the acting CEO.)
Cleanse your data
The second thing you need to do is clean your data. One of the most valuable assets inside a telco is the petabytes of data you have about how subscribers use the network. But it’s hard to extract the signal from the noise to get insights that can drive revenue growth.
You need to extract personalized insights in seconds, not days, and put them into action the moment you need to influence customer behavior. That would be amazing, right? You can’t do it today because your data is a mess. So, clean it up.
Acquire cloud talent
Next up: people. To start using the public cloud, you don’t need to turn your telco into a software company. But you do need to start hiring and help your people learn how to design applications using cloud-first principles. To do that, you need to modernize your human resources (HR) programs to attract top talent.
Cloud skills are the most in-demand type of technical expertise in the job market today, and you’re competing for talent against the world’s best tech companies (and their really competitive compensation packages). You need leaders who can set (and hit) aggressive goals for moving the organization to the cloud. And you need software developers who can build applications in hours that are auto-scaling, self-healing, and that deliver the lowest total cost of ownership (TCO) and use the right cloud service for the job.
As an ex-HR professional, let me tell you: moving to the public cloud is going to take a strong HR strategy and partner. If you’re going to change the platform your IT group is based on, you need to realize that this isn’t just a technology decision you’re making: you are changing the culture of your technical organization. So, do the work to put a strong strategy together to hire and motivate the troops, get them trained, create a plan, and deploy the initiative. This will not be done overnight, so get started now.
This sounds hard. Why are we doing it again?
Once you do these three things—modernize your systems, cleanse your data, and hire cloud talent—you’ll be set to unlock a competitive advantage and leverage your biggest asset: your network. Instead of being only about creating marketing offers around the use of the network, you’ll be able to technically leverage your network. Turn network events into moments of excitement for your customers and use your technical advantage to obtain a higher net promoter score (NPS).
Global tech leaders like Amazon, Netflix, and Apple have NPS scores that are through the roof. They understand that without customer love, you can’t expand your average revenue per user (ARPU). They don’t have the leverage to force their customers to use their next-generation like telco does.
The tech companies put customer love at the center of their business models. They focus relentlessly on their customers. They provide great experience after great experience, and their revenue continues to grow and grow. That’s how you support a growing, demanding customer ARPU. For example:
Amazon started with books and now it sells you everything—including data centers.
UberEats exists only if Uber RideShare is awesome.
Apple’s customer experience is world class, so people line up to buy its products.
All of these companies can expand because their experiences are great. But telco, I’m sad to say: You aren’t even close. You have to get that NPS up—like double—so you can expand ARPU.
If telcos use the next 10 years to adopt the public cloud, change their culture, and fix their NPS, they will be the future of the digital consumer. The telcos that make this transition have the most exciting decade in front of them. It is doable—when you embrace the public cloud AND change your culture to focus on customer love. But you have to give up the security blanket of the network.